U.S. Consumers Had Short-Term Response to First
BSE Announcements
Food safety news following
the discovery of infected cattle increased consumers’
awareness of BSE but did not affect beef purchases
beyond a brief period.
Fred Kuchler
and Abebayehu
Tegene
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Food
purchase data reveal that the response
of U.S. consumers to the 2003 discovery
of BSE in two North American cows was
limited and dissipated within 2 weeks. |
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Purchase
data are a more reliable source of information
on consumers’ risk perceptions
than consumer surveys.
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Future
food safety announcements may not have
the same effect on consumers’
food purchase decisions because consumers’
risk perceptions are likely to change. |
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In May 2003, several U.S. Government
agencies announced that bovine spongiform encephalopathy
(BSE—also known as mad cow disease) had been
found in Alberta, Canada. The following December,
agencies reported that a cow in Washington State
had BSE. Both of these announcements had the potential
to influence consumers’ food choices and retail
food markets in the United States.
To measure consumer reaction to
those announcements, ERS researchers compared household-level
retail food purchases of three types of beef products
before and after each announcement to see if consumers
reduced their purchases of those products, and,
if so, for how long.
Evaluating the impacts of BSE announcements
is only the first step in being able to forecast
the impacts of other BSE or food safety announcements.
Consumers’ reactions to food safety news will
be influenced by how much it changes their risk
perceptions. Consumers’ beliefs about food
safety may change over time, and subsequent announcements
could be made under very different conditions.
Beef Purchases Fell Briefly
in Some Markets
Many consumer surveys were conducted
after the BSE announcements. Each survey asked consumers
whether they reduced beef consumption following
the announcements. The main drawbacks to such surveys
are that consumers’ memories of previous food
purchases may be error prone and consumers may sometimes
feel compelled to answer in the affirmative. Using
records of food purchases can be a more reliable
means of assessing consumer response.
Food purchases vary throughout
the year and evolve over time. Americans habitually
consume more of particular foods seasonally and
around holidays. Some foods, over time, have fallen
out of favor while other foods have taken their
places. Change attributed to BSE announcements might
be confused with seasonal purchase patterns or longrun
trends if underlying patterns created by habit and
tradition, as well as evolving preferences, are
not taken into account.
ERS researchers used food purchase
records to establish a pre-BSE-announcement baseline.
Researchers examined three markets—fresh beef,
frozen beef, and frankfurters. Frankfurters are
more processed than frozen beef (primarily steaks
and hamburger patties). More processed food satisfies
demands different from those for fresh or frozen
beef, so a BSE announcement might have different
impacts on consumers’ frankfurter purchases
than on other meats.
Using purchase records from the
Nielsen Homescan panel, researchers estimated total
U.S. beef purchases before and after each announcement.
Data were available from 1998 through 2004, extending
more than 5 years before the first announcement
and a year after the second announcement, allowing
comparisons of purchases before and after the announcements.
(The Nielsen Homescan panel is a nationally representative
panel of households that scan their grocery purchases
at home, thereby providing detailed information
about each food item, including the purchase date,
expenditure, quantity, and attributes that finely
differentiate food products. Panel size varied from
7,124 households in 1999 to 8,833 households in
2003.)
Weekly purchases of fresh beef
products exhibit strong underlying patterns. Fresh
beef includes roasts, steaks, veal, hamburger, ribs,
and liver purchased from grocery store meat counters.
Fresh beef purchases show a 7-year downward trend,
at an average rate of 5.2 percent annually.
Fresh beef purchases also display
seasonality with predictable peaks and troughs throughout
the year. Troughs in beef purchases occur just before
Easter, Thanksgiving, and Christmas. Deep troughs
occur exactly as other meats peak (turkey at Thanksgiving).
Peaks in early March and around summertime holidays
are typical.
Frozen beef and frankfurters display
different longrun trends, but all three types of
beef display peaks at summertime holidays and troughs
prior to Easter, Thanksgiving, and Christmas. The
May 20 announcement came just before the Memorial
Day peak in purchases and the December 23 announcement
came just before the trough at Christmas.
After accounting for trends and
seasonality, researchers found that the market for
fresh beef provided the strongest case for an impact
from the BSE announcements. There is no statistical
evidence that the Canadian announcement altered
purchase patterns of fresh beef, but purchases during
the first 2 weeks after the Washington State announcement
were unusually low. Following the announcement,
frozen beef purchases fell only for the first week.
In contrast, frankfurter purchases dropped in the
second week following each announcement, but purchases
of no-beef frankfurters also fell, suggesting that
unrelated events were more likely responsible for
the decline.
Statistical uncertainty precludes
a calculation of a reliable estimate of the pounds
of fresh beef not purchased because of the BSE announcements.
However, the duration of adjustments is clear. There
is no evidence of any response beyond 2 weeks after
the announcements.
BSE Announcements Did
Not Change Consumers’ Risk Perceptions
The short duration of the drop
in beef purchases suggests that the announcements
did not fundamentally change consumers’ risk
perceptions. Assuming that consumers always make
food choices under some set of assumptions about
risks, they will adjust food choices only if the
news changes their risk perceptions. For the BSE
announcements to change consumers’ purchase
behavior, they would have had either to affect consumers’
perceptions of the likelihood of contracting variant
Creutzfeldt-Jakob disease (vCJD)—the human
form of BSE, which is strongly linked with exposure
to BSE—or to change consumers’ perceptions
of the severity of the health outcomes.
Survey evidence on consumers’
BSE risk perceptions supports the conclusion that
the announcements did not change consumers’
risk perceptions, although consumers did become
more aware of the disease and its human variant.
Consumer surveys conducted by the National Cattlemen’s
Beef Association asked consumers if they had heard
about mad cow disease in the last month. Results
indicated that awareness of BSE increased after
both the Canadian announcement in May 2003 and the
Washington State announcement in December 2003.
In the latter case, awareness increased from 61
percent during the quarter prior to the announcement
to 96 percent in the quarter after. The survey also
asked respondents if they were confident U.S. beef
is safe from BSE. The quarterly surveys show the
share of respondents confident in beef’s safety
increased even after each 2003 announcement.
In addition, U.S. consumers’
knowledge of vCJD seemed to increase after the announcements.
For example, Joost M.E. Pennings, Brian Wansink,
and Matthew T.G. Meulenberg conducted a survey of
consumers in the United States, Germany, and the
Netherlands in the last week of January and the
first week of February 2001 (before either U.S.
BSE announcement but after the first announcement
of finding BSE in Germany). The survey characterized
U.S. and Dutch consumers as perceiving significantly
less risk from beef than German consumers. Survey
results also indicated that U.S. consumers were
the least informed about vCJD. A survey by researchers
at Rutgers University conducted in mid-January 2004
(after both announcements) indicated that, although
Americans were still far from fully understanding
all the consequences of vCJD, about 75 percent were
aware that vCJD could be fatal.
It is surprising that the purported
increased awareness of vCJD after the two announcements
did not lead to a larger fall in beef purchases.
Analysis of the publicity BSE received in Great
Britian showed a substantial, but temporary drop
in beef demand in the early 1990s. It also revealed
a smaller, but persistent reduction in demand. Analysis
of the first BSE announcement in Japan showed qualitatively
similar results: an immediate drop in beef consumption
along with a longer-lived reduction in demand.
The symptoms and outcome of vCJD
lead one to speculate that consumers could react
negatively to BSE announcements. BSE and vCJD fall
into the class of diseases called transmissible
spongiform encephalopathies (TSE). All TSE diseases
display a prolonged incubation period of months
or years and are progressive and debilitating neurological
illnesses. There is no treatment for them, and they
are always fatal.
If BSE announcements had signaled
consumers that beef was unsafe, there were few preventive
actions consumers could have taken, other than switching
to other meat products. Unlike bacterial contamination,
which may be controlled with cooking methods and
ordinary hygiene, there are no such safeguards against
vCJD. Likewise, bacterial contamination poses a
lower risk of illness or death to healthy adults
than to those with compromised immune systems, the
young, or the elderly. In other countries, vCJD
has killed people with no underlying health problems,
so being healthy might not offer much defense.
Since the first announcements, additional food safety
regulations have created greater protection from
BSE exposure even if infected cattle were slaughtered.
Safety experts have identified particular tissues
in an infected animal’s carcass that could
be unsafe. As long as those tissues are removed
from the food supply at the source, any and all
other products derived from the carcass are considered
to be safe. But unless consumers are as aware of
these safety measures as they are of infected animals,
the existence of infected animals could reduce beef
consumption.
Government Took Action
After BSE Discovery
Given the dreadful nature of vCJD,
the limited consumer response suggests that consumers
considered additional information in making beef
purchase decisions. It appears that as consumers
were becoming more aware of BSE and vCJD, they were
also getting the message that the risk of exposure
or contraction was very low. After the BSE discoveries,
several Federal agencies made public statements
that the likelihood of exposure to BSE was negligible
and that the government was taking steps to reduce
the risk even further.
On May 20, 2003, the Food and
Drug Administration (FDA) issued a statement saying
that the Government of Canada reported that a cow
in Alberta had tested positive for BSE. FDA said
meat from the infected cow did not enter the food
supply and, although there was no evidence of transmission
to other animals, the infected cow’s herd
mates would be destroyed as a precaution. In its
statement, FDA stated, “To date, no case of
BSE has ever been found in the U.S., despite years
of intensive testing for the disease.”
FDA described USDA’s Animal
and Plant Health Inspection Service import prohibitions
on cattle and beef from countries that were on the
list of BSE-restricted countries (which was immediately
amended to include Canada). FDA also highlighted
its rule prohibiting mammalian protein from being
fed to ruminants; that rule was designed to limit
the spread of BSE within the United States even
if it did cross the border.
In December 2003, the Centers
for Disease Control and Prevention (CDC) issued
a statement after the Washington State finding.
CDC also described some of the USDA programs—the
testing that confirmed the BSE finding, the beef
recall, and the epidemiologic investigation into
the disease source—as well as the apparent
species barrier protecting humans from BSE. In its
statement, CDC stated, “The risk to human
health from BSE in the United States is extremely
low.”
Following the Washington State
finding, the Secretary of Agriculture was interviewed
by major media outlets and issued public statements
describing new programs that USDA was undertaking.
For example, on December 30, 2003, the Secretary
announced an expansion of the ongoing surveillance
program, new regulations that would reduce consumer
exposure to BSE if it were in animals intended to
be part of the U.S. food supply, and development
of a national animal identification system. New
regulations included a ban on the use of downer
cattle—those too sick or injured to walk—for
food uses; a requirement that slaughter plants remove,
segregate, and dispose of tissues most likely to
harbor the BSE agent, so they do not enter the human
food supply; process-control regulations on advanced
meat recovery that would prohibit spinal cord tissue;
and a regulation prohibiting the use of air injection
to stun cattle. A technical team provided daily
public statements for several weeks, reporting progress
in the epidemiological investigation and on tracing
the infected animal’s cohorts. USDA’s
Food Safety and Inspection Service provided updates
on the meat recall. And, like the CDC and FDA statements,
the Secretary of Agriculture reminded the public
that “…our food supply and the public
health remain safe.”
The limited response to the BSE
announcements indicates that consumers did not revise
their perceptions of the likelihood of exposure
to BSE. They thought the risk was low before and
after the announcements. In addition, the negligible
likelihood of exposure seemed to have had a larger
influence on food choices than increased awareness
of BSE and vCJD.
Future Announcements Likely
To Generate Different Responses
If consumers always responded
the same way to food safety news, one study would
provide information allowing analysts to confidently
predict consumer responses to other food safety
incidents. That is, understanding responses to one
BSE announcement would point to responses to another
BSE announcement or entirely different food safety
issues. Unfortunately, one study is not enough because
consumers’ risk perceptions are likely to
differ among news events.
Measuring the impacts of the 2003
BSE announcements provides some information about
consumer behavior, but also reveals the gaps in
our knowledge about the baseline factors that guide
food choices and the attributes of risks that are
most important to consumers. This case reveals that
consumers’ beliefs about the likelihood of
exposure to BSE were the most significant factors
affecting the outcome. But it does not say how low
the likelihood of exposure has to be before it is
the only factor that guides consumers’ food
choices.
There is no reason for consumers’
ideas about the likelihood of exposure to BSE to
be rigid. Since 2003, there have been additional
BSE announcements in Canada and the U.S. These newer
announcements could have already changed consumers’
risk perceptions. Any additional BSE announcements
could also change risk perceptions. And consumers’
response to future food safety news could yield
entirely different food choices.
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